Posted
by
Soulskill
on Saturday December 24, 2011 @09:50AM
from the still-occupying-jobs-there dept.

An anonymous reader writes "Eric Schmidt says what we all suspected: Silicon Valley has largely been immune to the Great Recession. He said, 'Occupy Wall Street isn’t really something that comes up in daily discussion, because their issues are not our daily reality. We live in a bubble, and I don’t mean a tech bubble or a valuation bubble. I mean a bubble as in our own little world.... Companies can’t hire people fast enough. Young people can work hard and make a fortune. Homes hold their value.'"

We don(t ignore them, but the tech world and the bean-counting world have been in a state of cold war for decades. They won't manage to stealthily come into our ranks, we prefer to create software to replace them rather than hire their kin.

The bean counters will come, eventually and a price will be put on everything and the value stripped.

It's called an MBA degree. The focus used to be in how to bring efficiencies to an ongoing concern, it has slowly and subtly switched to stripping valuation from brands. It goes like this:

1) buy or get hired by a company that has a hard won reputation of quality2) work huge financial incentives into your contract if profits double3) cut quality by 50%, prices by 20%.4) initially sales skyrocket due to lower prices5) collect handsome bonus6) work golden parachute into contract7) brand collapses as people realize quality is no longer there8) get fired, collect additional $50 million severance package

Welcome to XXI century American capitalism. This will appear in her epitaph.

This is so true and so rarely discussed. Adam Smith--so beloved of talking-head capitalists--thought publicly held corporations were a terrible idea, but somehow that part of the message never comes up on CNBC when they're discussing the invisible hand. P.J.O'Rourke wrote a book about Smith's Wealth of Nations and even called the old man out for his error--too early. Turns out, the raping of great companies through the blindness of their absentee owners is just one of those disasters that takes a while to play out, like democracies voting themselves into bankruptcy. I'd say we're making good progress toward collapse on both fronts now, though.

the raping of great companies through the blindness of their absentee owners is just one of those disasters that takes a while to play out

Curiously, when thinking about companies that don't value their brand, I started thinking of one that does and is also rewarded handsomely for it: Apple.

With them being the exception to that rule (a quality one could arguably describe to Jobs' iron fist and intense RDF), do you think that something like that can be maintained by any CEO, such as Cook, or does it really take a truly unique personality to do that for a company and its brand(s)?

While mainly true, let's not pretend there's much in silicon that can be replicated.

It is your typical isolated exported oriented bubble. Not everyone can be an exporter. Just like not everyone can be like Germany and export high-end manufactured goods. Not everyone can be like Norway or Saudi exporting oil.

It's also not a large employment model. There's only going to be so many innovative Search companies, OS, smart phones, chip set makers...

And that only works as long as the population is small. Heck, the amazing wealth in silicon valley can't even bring prosperity to a single US state. Much less a large nation.

In the grand scheme of things, Silicon Valley might be great for the advancement of technology and small groups of people, but it does virtually nothing for the economic condition of a large nation.

The more I grow up, the more I see Silicon Valley as a really good coping mechanism for a heroin addict. A nation addicted to needing more and more growth to cover a lifestyle it can't afford. And it has reached a point it can't obtain the next high.

The mainstream media was declaring continually "OWS has no message". Frustrated, I simply asked them. I began soliciting online "What is it you want?" answers from Occupy. In the first 15 minutes, I received 100 answers. These were truly eye-opening.

The No 1 agenda item: get the money out of politics. Most often cited was legislation to blunt the effect of the Citizens United ruling, which lets boundless sums enter the campaign process. No 2: reform the banking system to prevent fraud and manipulation, with the most frequent item being to restore the Glass-Steagall Act â" the Depression-era law, done away with by President Clinton, that separates investment banks from commercial banks. This law would correct the conditions for the recent crisis, as investment banks could not take risks for profit that create kale derivatives out of thin air, and wipe out the commercial and savings banks.

No 3 was the most clarifying: draft laws against the little-known loophole that currently allows members of Congress to pass legislation affecting Delaware-based corporations in which they themselves are investors.

When I saw this list â" and especially the last agenda item â" the scales fell from my eyes. Of course, these unarmed people would be having the shit kicked out of them.

It may be a simple way to put it, but is "get the money out of politics" any more insightful of an actual course of action? My point was that if the government would stop regulating every aspect of our lives, corporations would face more competition from small businesses and would find less value in spending money on politicians than in some other use for that money. Government regulation always increases the disadvantage small companies (especially one or two person operations) have when it comes to competing with large companies, yet large companies are almost always the ones guilty of the action that causes people to call for government regulation. So, here is the pattern, large company does something unethical/dangerous, people call for government regulations on that industry, small companies face greater obstacles to compete with large company, large company makes even more money, rinse and repeat.

is that you might actually be naive enough to believe that load of crap. The regulations are there because morally bankrupt people and the companies who are run by them have no qualms about poisoning and even killing you if it helps their bottom line. your impotent little small businesses don't even enter into the equation. Assuming tat they aren't also interested in lining their own pockets at your expense in order to some day be one of the big guys.

Excuse me where did I say there should be no regulation?
Why is it on this board that whenever someone suggests that many of the problems in the U.S. and/or Europe are the result of excessive government regulation someone thinks it is insightful to say something along the lines of, "Oh yeah, well go live in Somalia if that is what you want." When in fact that was not what the person said they wanted.
Both North Korea and Somalia illustrate the same problem. The complete and utter absence of the rule of law

Why do people give money to their candidates? They haven opinions and views that they want codified into law, forcing everyone to thank and act in their preferred manner. Or perhaps on the flip side, they donate to prevent that.

Business and special interests do so for the same reasons but they also want special exemptions are carved out for themselves or government mandated rent seeking.

The problem is not money -- wouldn't businesses prefer to keep that money for themselves? -- but a government that

Funny you mention these three because the Tea Party movement warned about this earlier, and one Sarah Palin specifically cited this problem in her criticism of "crony capitalism" on a speech she made back in September 2011. The fact that Solyndra collapsed right at the time of her speech made her assertions even MORE potent.

In short, I'd like to see these changes to our financial system:

1. Require real liquidity backing for all investments--that includes hedge funds, derivatives, and so on.2. Increase the minimum margin requirement rate for futures trading to 20%, with a 35 to 40% rate for strategic important items like petroleum products, certain foodstuffs, certain industrial metals and precious metals.3. Reimpose the 1933 Glass-Steagall Act and give investment banks 18 months to separate out banking and investment operations.4. Require that anyone who enters government service to put into a "blind and deaf" trust any holdings (stocks and bonds) of any private company held at the time they enter government service or require that the stock and/or bond holdings be sold off.

Implement these four changes and I think we'll bring stability back to the equities market in about 18-24 months.

The No 1 agenda item: get the money out of politics. Most often cited was legislation to blunt the effect of the Citizens United ruling, which lets boundless sums enter the campaign process.

No 2: reform the banking system to prevent fraud and manipulation, with the most frequent item being to restore the Glass-Steagall Act â" the Depression-era law, done away with by President Clinton, that separates investment banks from commercial banks. This law would correct the conditions for the recent crisis, as investment banks could not take risks for profit that create kale derivatives out of thin air, and wipe out the commercial and savings banks.

No 3 was the most clarifying: draft laws against the little-known loophole that currently allows members of Congress to pass legislation affecting Delaware-based corporations in which they themselves are investors.

The funny thing is that most Tea Party people are also for all of that. It is in the politicians interest to keep us divided, however. If the public ever wakes up and realizes that the Tea Party and Occupy Wall Street want the same thing, the party in Washington is OVER.

It may well be that many of those who call themselves Tea Part members may believe that. It might even be that oranizers at the local level belive that. But it is quite clear that the organizors at the state and national levels, and the elected politicians who are beholden to those people, have no interest in that sort of thing at all. In fact they have consistently rejected anything like those ideas in legislation.

Of course part of this disconect is that there is so much marketing going on by people paid by large groups (the Koch bothers come imedialy to mind, but they are far from the only ones) who can afford to buy saturation advertising with carefully crafted emotional messages that stop any rational debate and obscure/obliterate any real thinking. The-powers-that-be in the (large scale) Tea Party are absolutely against at least part of the message you feel is comming from the Tea Party rank-and-file. And I really do fear that in order to have any real chance as a orgainzation the Occupy movement will wind up in the same situation.

Agreed. Companies that don't need political protection to survive, don't need favors from politicians, nor seek value by political manipulation of the marketplace don't need to be Occupied.

I couldn't disagree more. Political manipulation of the marketplace? How about political manipulation to shift the burden of paying taxes onto the individual instead of the corporation? Like lobbying congress to keep tax loopholes in place [sfgate.com]? And if Google doesn't need to lobby politicians then why give them money [followthemoney.org]?

Now can someone tell me about the Occupy movement's actual goals and desired outcomes?
It seems to me that without an end in mind, this movement could be corrupted and taken over by celebs just like the Tea Party.

Well, as I've posted before, I'd imagine economic justice [slashdot.org]. To specifically address my point above about tax dodging, I feel that our taxpaying dollars present these companies with one of the best and safest environments in the world to run a business. From police forces to firefighters to the highway infrastructure to educating your customers in the public schools. The reason you might think that all those things are going to shit is -- as I see it -- companies reap the benefits from them and then shift revenue through Ireland or The Netherlands to avoid paying for them! There's something specific you can fix. Right now it's you and me picking up the slack in income and sales tax!

Their goals and desired outcomes are plain to see and they are achieving them.

Statements like this from Charles Schumer show that the Dems in Congress are paying attention to the middle class and the 99% even if they aren't attributing it to the OWS movement directly. Income inequality, being a point taken up by Dems now, is also one of the main points by OWS. I think their not having a "list of demands" is perfect.
They are changing the conversation. That is their goal. I do not fear them being taken

Question: Who gets to determine who "deserves" what? I can just as easily say that no one needs or deserves to have more than two children, or to marry once in their lifetimes, or to own one car at a time, or to own one computer at a time in any personal household... IMHO, maybe you ought to shy away from the subjective when making demands of government. It's bad enough that they've been taxing tobacco and alcohol to push specific moral agendas (most of which hits the poor harder than anyone) - let's not start pushing more of it, mm'kay?

IMHO, if they'd simply ditch all tax loopholes, tax all human and corporate entities with incomes above $75k/yr a flat 30%? You'd have perfect tax 'fairness'. 'course, no one wants to do that - and I do mean no one. The middle class wants their mortgage and EIC credits, the rich want their loopholes, corporations want theirs, etc...

I favor taxing of tobacco and alcohol exactly to the extent that their use costs the rest of us money (paying medical bills for cancer caused to self or others, and the victims of drunk driving for example). I'd be perfectly happy to switch that to an insurance model where you were legally obligated to buy alcohol/tobacco insurance before use, though. Either way, it's all about society having some way to recoup the costs being created by those habits, costs which unfortunately aren't accounted for in the

Homes over a million? That's almost all of them around here.Offshoring? So oughts. All the modern tech companies in the valley have realized that to build competitive apps you do it with manpower here.Young people making money? Well, you do have to be lucky or smart in your startup choice, but facebook is about to mint another batch of over a thousand young millionaires to help keep those house prices propped up.

Homes in the bay area are holding their value for one simple reason at this point...a coordinated effort on the part of the Chinese government to purchase real estate in San Francisco. Anyone who's tried buying a house in SF in the past 2-3 years is likely familiar with the situation of having a bid rejected because an all-cash offer for over asking was made by an overseas buyer. The real estate agent I spoke with indicated that every one of these bids that she's seen has come from a single, state-owned, Chinese bank. This alone has propped up housing demand and forced other buyers to look elsewhere in the area.

The conspiracy nut in me would be very wary of hiring Chinese nationals who've just purchased homes in the area. We're all painfully aware of the wages that developers make over there (thus the outsourcing problem), so when they start outbidding locals for expensive homes and the money is coming from the Chinese government, you have to wonder whether they're part of their already-well-covered industrial espionage efforts.

I don't reckon there is a state sponsored conspiracy to buy up real estate in San Fran. (occam's razor and all)

I'm living in Hong Kong, where "luxury" residents have been gobbled up by mainland Chinese buyers, in pretty much the same way (all-cash, at inflated prices). It has messed up the property market enough for there to be anti-capitalist sentiments here among the local population because they can't afford (in their lifetimes!!) to buy a home. The gossip is that it's become sort of "fashionable" among the rich Chinese to "invest" in overseas properties, perhaps particularly in places with relatively high Chinese populations...

Sometimes it's for emigration purposes. And China is having its own housing bubble right now, so real estate speculators there are looking abroad for new markets to play with.

(Of course it isn't fun to be trumped by the army of mysterious Chinese buyers even if it isn't necessarily a Chinese government conspiracy, but just in case you're interested to know.)

That's what i have been telling my colleagues (all of them are in i.t., or i.t. companies) whenever the issues occupy wall street is raising came up. Almost all of them have been saying 'i have worked "hard" and made myself. everyone can' - because they are living in a bubble. Their skill set and aptitude, matches the time period they are living in. We are living in an era where skills/inclinations that i.t. requires are in high demand, and therefore we are in luck. Had we lived in an earlier era, we would be hard pressed to make a living.

And no - dont ever fall into the pit of thinking that 'because i am smart, i could make it' -> it does not work that way. Talent/inclination works differently than 'smart'. Cognitive powers does not have direct relevance to the inclinations you have - there are a lot of smart people, scientists too, who find i.t. work quite stressing, irritating and unbearable. and vice versa.

So we are lucky. if we had been born back in 15th century, we would be shining a feudal lord's shoes maybe. with all our smarts, but without anything on that time and age to support our particular talents.

Same the situation with majority of people - things that were in huge demand 50 years ago, are not in demand today. Things were inconceivable 50 years ago, are in demand today. But, dont err in thinking that 'adaptation is necessary' -> it is always this way - in a society with ills of capitalism, there is always huge demand for a very little percentage of talents, and the demand for the rest is never enough to feed the population.

And in this environment, those who 'made it' because they were lucky tend to think that they made it because of their 'talents'. Nay. you were lucky to hit your mother's womb in the perfect time.

It is utterly stupid to live in bubbles, devoid of perception of reality, and then to apply one's own bubble to reality, and be content with it. middle class today (which is a pathetic 10% in usa as of this moment btw) does that. and they are no different in position than the clerks, guards who did the feudal lord's bidding back in middle ages, for slightly elevated comforts.

Ummm... I, like a lot of people in tech, have no inclination to be doing what I'm doing. I'm doing it to make money, same as I would have in any other time period. I looked around, saw here was a thing I could learn to do to make money, and did it. At the time I made that choice it seemed like basically doctor, lawyer, finance and computers were the way to go. Doctor required too much memorization, a difficult area for me. Lawyer/finance were too evil. So computers was my choice, and I worked to get

Looking back as far as 15th century or further is pointless: people had very little choice about what field they went into, it was mostly determined by your birth. Today people can actually make something of themselves.

irrelevant - people who had talent, had the liberty to do anything they pleased, more or less. thats why leonardo da vinci did not till the fields or other masters and artisans made shoes and so on. in renaissance, the need for skills in demand was so high that it even surpassed the medieval law and customs. so, someone with the right talent being born then, was much more luckier than someone being born today. and that's what the example illustrates : even in a period like renaissance, when talents surpasse

We are living in an era where skills/inclinations that i.t. requires are in high demand, and therefore we are in luck.

Society has always rewarded intelligence because working smarter has always equated to producing more whether it's using a wheel vs a sled or a farmer rotating his crops and irrigating his fields. Likewise, in earlier eras, those who knew how to read and do simple arithmetic were much better off than those who didn't, which was most of society (kind of like today where most people don't kn

and furthermore, 'getting rich' by 'hard work' is the biggest piece of fraud that is perpetrated by current system. can you think that someone who is owning majority or even noticeable share on a megacorporation, got rich through 'hard work' ?

now, if you redefine hard work to be 'making others work and taking the fruits of labor to 90% percentage', then it becomes possible. but then again, in the last 50 years that has also been circumvented - those who are owning the means are making a tiny minority (mostly from middle class) work for them to make others work for them, and reaping the profits. in short, we send our sons, daughters to business colleges to get high degrees and be high level managers, even executives to make all the people work for the sake of a minority owner percentage. no different than the peasants sending their sons to be lord's soldiers, or tax collectors.

Actually I think you are wrong. I as well as my friends have all worked hard and we are very happy. We are happy because we don't define our lives by our jobs and how much money we have, but by our families and friends. I find it funny that you seem to define happiness by the very people you hate. You define happiness by money for which is the sole apparent motivation of the people you think cause all of your problems in life.

Here is a suggestion, don't give those "evil" people the power of "happiness" in your life. I would explain more, but I wanna go have a nice snow ball fight with my kids....see how that works.

Here is a suggestion, don't give those "evil" people the power of "happiness" in your life. I would explain more, but I wanna go have a nice snow ball fight with my kids....see how that works.

A good support system(friends, siblings, parents, spouses) is definitely key to surviving corporate bullshit. The problem is that, when you have kids, your corporate overlords actually gain more leverage to squeeze more work and longer hours out of you. At this point in time, I recommend that non-wealthy Americans who are considering having kids wait until the pendulum swings back toward the common worker's favor or move into a country with those conditions.

and furthermore, 'getting rich' by 'hard work' is the biggest piece of fraud that is perpetrated by current system. can you think that someone who is owning majority or even noticeable share on a megacorporation, got rich through 'hard work' ?

Sure they did. The only catch is that all of that hard work was done by lots of other people.

and furthermore, 'getting rich' by 'hard work' is the biggest piece of fraud that is perpetrated by current system. can you think that someone who is owning majority or even noticeable share on a megacorporation, got rich through 'hard work' ?

A few, actually. The pattern with them, though, is that they're all older (60+) and have been with the companies for a loooooong time.

I think the difference is that many companies in the past would promote from within, and the best workers would rise to the top. Nowadays, this seems to not be the case - workers who do well are kept in their positions and the top level is hired from the outside.

its not 'pessimism'. its statistics. and yes, everything is the fault of someone else. namely, the 5% top of the population who has 72% in total of income and assets - including wealth generation tools. the rest ? 85% bottom of society (almost everyone, you see) get only 15% from income and wealth in total.

yes indeed. its really the fault of someone else in this situation. in a dog eat dog world, you end up with one big fat dog. we are just 2-3 ste

because, anyone who is dare able to say 'philosophy is not needed', deserves a sound kick in the face. the current capitalist mechanic of corporate exploitation not needing something to make immediate profits in short term, does not mean that that something is not needed.

Philosophy is needed. A truckload of philosophy majors is not. While there are many contributing factors in the way things are now, you can't write off a lot of these dimwitted kids who blow $60k in loans on a BS in Psychology or Fine Arts and then cry that they can't get a job with it.

These people don't understand that their cushy lives and jobs depend on a strong US economy. Even if you aren't seeing the effects of it yet, it will still impact you eventually through soaring costs. We're all in it together.

These people don't understand that their cushy lives and jobs depend on a strong US economy. Even if you aren't seeing the effects of it yet, it will still impact you eventually through soaring costs. We're all in it together.

I think you meant to include the word "should" in there because that's how it should work. However, I might point out that if the government determines you're "too big to fail" then you have a safety net and you can screw up your company as badly as you want. Now, if you're lobbying congress and providing them with tons of soft money, you might just be "too big to fail." Congress might artificially keep their bubble protected by turning briefly to Communism where they buy out and then own parts of the fa

Google (and the rest of the tech giants) have been dodging taxes [slashdot.org] and I hope that when those Oakland OWS demonstrations spill over into Mountain View that the police don't have enough tax money to keep drenching the protesters.

I won't argue that there isn't something wrong with the fact that those businesses paid so little in taxes, but I do wonder why your ire seems to be directed at the businesses themselves, rather than the dysfunctional government which allows the loopholes. If what they did is legal, then why wouldn't they take advantage of the loopholes to preserve value for themselves and their shareholders? When you do your taxes, do you take all of the deductions available to you, or do you take some sort of moral high road out of patriotic duty? I'm annoyed that my net worth isn't enough to let me play the same games. Hoping that the US tax system will become fair is useless. What most folks don't recognize is that making adjustments to the tax code is a powerful tool for Congress-critters to reward or punish friends and foes. Probably more powerful than earmarks, because it's subtle.

I don't think this particular outcome is inevitable. What could happen instead is that the economy just throws the poorest people (in other words, workers least in demand) overboard, effectively reducing the size of the economy while maintaining stable productivity and keeping essential assets and almost all money in the system. The economy will remain strong but actually serve less people. This kind of economic shrinking might go for quite a while before it even barely touches the IT sector. Mostly because

These people don't understand that their cushy lives and jobs depend on a strong US economy.

Which explains why they've managed to do well for the past three years how, exactly? The economy has generally sucked since 2001, and really sucked since 2009. If Silicon Valley depends on a strong US economy, they should have tanked along with the rest of the currently very weak US economy.

They did. You just didn't notice. There were massive tech sector layoffs in about 2000-2003. The Silicon Valley didn't take as much of a hit in 2009 because it had already taken most of the hit up front in the dot-com crash.

Also, the notion that Silicon Valley housing prices are immune to the bust is a ridiculous myth. Maybe a few neighborhoods haven't taken a hit, but home sales and home prices in Sunnyvale have dropped significantly, as have prices in Santa Cruz, Los Gatos, and everywhere else I've ac

These people don't understand that their cushy lives and jobs depend on a strong US economy.

Why?

Many big companies have strong presences outside of the US, and receive a majority of their revenue from international sources. If they have their headquarters and most of their workers in the US, though, their expenses are primarily in USD. If the global economy gets stronger as the US economy gets weaker, it can actually be beneficial for these international companies. The exchange rates will be more favorable, and their expenses will be a lower proportion of their overall revenue.

In short, what Schmidt saw is the continued success of Apple, Facebook, Google, Twitter, Zynga, and biotech companies. As a result, these companies literally held up the economy of the Bay Area, and probably prevented a major cratering of the housing market that continues to plague much of the rest of California. Small wonder why the Occupy movement in the Bay Area (in my opinion!) didn't take long become a MAJOR annoyance, and in the end the Occupy encampments in San Francisco, Oakland and Berkeley were sw

I'm one of the unemployed (older and seasoned, yet not able to find interviews or jobs in my field). to folks like me, we are *very* much in tune with the occupy movement. we're not at work being flooded with 'work harder, harder; longer, longer!' messages. we're not caught up IN the bubble, we're outside the bubble. we see what its like on both sides.

you don't.

that's what makes all the difference. I've been employed for about 3 decades (in the software field) and I've paid more dues than eric, in my time. he's attained a more powerful position but he knows far less about life than me - of that, I'm very sure. I can tell. anyone my age and with just my simple travels, can.

I'm currently 'over there' in the not-working group (or should I say, not-employed; I'm actually working quite a lot, in fact). I don't think it will stay that way for a long time, but I've been here longer than I thought. its a bit scary and I can see the corporate greed that is caustic to employees. everyone is there 'at the pleasure of the king', pretty much. I see that. the occupy guys see that.

maybe he really does get it but he also realizes that people at his level have to sing the same song. its possible. hard to tell if he believes his own bullshit or not. some do, some don't.

at any rate, many of the folks I know (techies who are also out of work and mostly of middle age or higher) are *strongly* aware and in support of the occupy movement. I'm right smack in the middle of silicon valley, not even very far from the google campus. I remember when it was the SGI campus, too (and I worked at SGI back in those days; before there was a google). I feel I have a good handle on the bay area and silicon valley. and I can say, he's full of shit.

"occupy" *should* really hit home with bay area workers. especially the knowledge-based workers; ones that can so easily be replaced and outsourced. the fact that we are not unionized and that we are a 'commodity' puts us at extreme risk of being fired for any reason and at any time. you've seen the downsizing in front of your own eyes. you can't deny that, can you? are *all* those guys really poor performers? do you believe that?

you've seen the downsizing in front of your own eyes. you can't deny that, can you? are *all* those guys really poor performers? do you believe that?

I often see companies announce a global X% trimming in headcount. And they don't appear to care who gets the chop. This happens in all sectors, and seems ridiculous to me.

For example: someone I know works in a multinational corp, when Global HQ said "cut X%" his department was affected, even though his department was profitable, and surpassed targets. And so it was either him or his colleague that was to go. In the end his colleague got the chop. But what's most ridiculous is there was still a lot of work for the profitable department! So he ended up overworked. I told him he should have volunteered to take the severance package (since he was single, his colleague was married with commitments, there was more than enough work, he needed a break, he was supposedly better at the job, so I figured maybe he would be asked to come back later;) ).

Analogy: to me this is like sacking one of two chefs in a very busy profitable restaurant, just because HQ isn't doing well. And the busy profitable restaurant suffers as a result, customers get poorer service. Isn't this a stupid thing to do? What motivation is there for people to do well then? You get sacked because HQ or someone else screws up. Not your team or even your branch.

I can understand sacking the chef if the chef sucks (he may not have been the best but he didn't suck), the restaurant is losing money (it wasn't), the business is going to nosedive (nobody there thought that was going to happen, and it didn't).

I can understand it if HQ says: trim X% of all the departments/branches that aren't profitable or didn't meet the targets or "service levels", those that are profitable can maintain headcount and those who are doing very well can increase headcount. This sort of beancounter logic I can understand. It motivates people to meet the requirements. Whereas if I were a manager in a "trim X%, no matter what" organization, I'd be tempted to hire cheap extras just to use as "cannonfodder" whenever cuts are required.

For five years now, you've worked your ass off at Initech, hoping for a promotion or some kind of profit sharing or something. Five years of your mid-20s now, gone. And you're gonna go in tomorrow and they're gonna throw you out into the street. You know why? So Bill Lumbergh's stock will go up a quarter of a point.

It's stupid to do these kind of layoffs if your goal is to maximize company profitability by having top-notch service. If your goal is to maximize personal wealth, which is often about short-term 'flips', then you may announce a layoff like that because you can get a stock bump, sell off at the high point and pick up a nice bonus. It's bad business, it's completely immoral, but it can be profitable.

However, it's not necessarily a bad move. One semi-legit reason that companies will

Anyway, what happens is many young workers try to keep hopping upwards quick since they have seen from what happens to the old guys that "loyalty" (and too often hardwork and competence) doesn't get rewarded. Whereas if you hop, you can usually get salary increases much faster. The company hiring you may actually pay you more than the existing staff even if you aren't better than the existing staff because they're short-handed and can't find other replacements - supply and demand and all that.If bosses want

..which is the bubble schmidt is talking about. in his social bubble there doesn't exist any unemployment - probably because if you're in that bubble and you're unemployed you already have loads of cash - if you don't, you disappear from that bubble. his comment is hilariously disconnected from general populace - which is even more hilarious because he works in a company which is supposed to be on top of information from(and to) general populace.

I'm over 60 and still working in software. My trick is to never leave home, never let them meet me face to face - the opposite of what you did. I work as a contractor by telecommute, etc. Never bring up the issue of your age. Find an excellent sales person with an existing customer base to come up with ideas and projects, that's been a very good way to go. This is a very interesting time to be in software.

People come to Silicon Valley for an opportunity. They know if they educate themselves, have some ambition and work hard, they can do very well.

Immigrants from other company often come here with the same attitude.

This is why you see neither at an "Occupy" rally. Actually, though I live 30 minutes from Boston, and just got layed-off, I have not attended any rallies, and instead, put my time and efforts into finding a new job. And guess what - my efforts have paid-off and been rewarded - well. (And yes,

I was told by a low-level IT manager that San Francisco and Palo Alto are one of the most expensive cities to have a house. He said she paid over a million for a modest house in Palo Alto.

So, what exactly I'm missing? Either they hold their value really high (saying they have an unaffordable price is weird), this manager's statement is overrated, Palo Alto/San Francisco aren't part of SV, Eric Schmidt is not entirely correct or all of the above.

When someone says homes hold their value, they mean that over time, a home doesn't lose value. Unfortunately, the timespan is 10s of years, not necessarily 18 months. The housing bubble/crash notwithstanding, homes are one of the only durable goods whose value stays steady, more or less.

Your statement seems to be an affirmation rather than a contradiction of the original claim. SF/PA are considered SV. The home prices are highest in the nation. They have remained that way thanks to holding their value.

Are you kidding? Silicon Valley was founded by chemists. To quote chemist Gordon Moore: "We would hire an EE to tell us if we had built anything useful." As long as you are strong in physical chemistry you should be able to find a place. Chemists have opportunities in both fab operations and new process development. You might find your wages go farther some place like Portland, though, where there are lots of semiconductor fabs and cheaper houses.

The defined the problem fine, but they didn't define a solution beyond "stop doing these things we have a problem with" and they failed to actually try to understand the hows and whys of the situations they perceive to be problems. They fall into the trap that so many people do; believing that other people have far more or less power than they really do.

Silicon Valley has done well through the recession for three obvious reasons:

1) They actually produce something that the rest of the world wants. We seem to have forgotten, as a culture, that someone has to actually make things; a service economy only works if you have someone to serve... Which leads into:

2) The bankers, the realtors, the assorted "middle men" of Silicon Valley provide actual services to those bringing in the money. They haven't (yet) replaced the doers as Silicon Valley's raison d'etre. The world needs bankers - The bankers just need to remember that real people need them to provide real money so they can buy real things, rather than bundling together unicorn farts and leprechaun gold and hoping to get-rich-quick selling it as an "investment" to morons who only see dollar signs.

3) No slackers allowed - The usual parasites in any community get about as much sympathy from geeks as they would from Hitler. 'Nuff said.

Hubris comes before the fall. And apparently provincialism will be driving the carriage.

Having worked occasionally in SiliValley, the corporate culture there smells surprisingly similar to every other corporation I've worked in. Ditto many startups there. There's a bit more zing, a bit more individualism, and they're rarely as broken/dsyfunctional as the worst firms I've consulted for, but they're never uniformly better than decent companies elsewhere.

Solyndra chose to build Lamborghinis when the market wanted Kias - They used an expensive and low-yield manufacturing process to produce a marginally superior product, but then had to compete with Chinese product at under half the cost per Watt.

They went under for good reasons. The only mystery in that situation comes from asking why the hell the US government decided to front an obviously flawed business model half a billion dollars.

Everyone in Silicon Valley who wants to take part in the Occupy movement just goes to San Francisco and Oakland. They're not part of Silicon Valley proper, but they're still part of the Bay Area. I think the difference is that entrepreneurs in Silicon Valley are part of the 99%

Young people (most of Google's employees) think they are indestructible.

I daresay that I am in better financial shape than 80% of Mr Schmidt's employees including those my age and I fully expect to keep innovating and being paid well for it until I am in my 60s and due to retire.

I cannot be certain that I will be OK financially at that point.

* Medicare may be a shadow if what it was* The social security I paid into on the majority of my income for the last several decades (while the "investor class" paid on little of their income) may be gone* The major corporations that committed to a pension may have shoveled the liability onto a disposable successor* Medical insurance may become unattainable* I could get disabled by the negligent act of a corporation with little or no compensation (Tort "reform") and get wiped out financially

It is time to realize that us 99%-ers are really in this together even if most of us are too busy working to join the protests.

There is no unionization of technical talent. IMHO, they figured out early on that they could make a boatload of money without some middlemen A) telling them that they're being treated like crap and B) if they only paid them money they would have a better standard of living.

That being said, I'm sure there are plenty of programmers out there who would dearly love a residual payment every time a piece of software they wrote was used just like Hollywood and music industry talent gets. Of course, that goes ag

the tenure of the article is much different from the title.
The Author is actually refuting what Eric Schmidt is saying. The recession DID hit Silicon valley.
Maybe not Google or Apple, but I know people that saw their salary cut by a good margin and houses devaluate in San Jose by around 20-30% in 2007/2008.
Sure, it's not the all-out crash, but on a 1 million $ house, that's still 200-300k.
And that's for those who were lucky to still be employed.
It's not because of a recession that some people and companies can't thrive (plunging stock markets are a candy store for short sellers). My company (senior software developer speaking) had a record-breaking year in 2011 for example. But I'm sure that's not the norm.

What I find interesting is that one place that Linux has made big inroads is in "big iron" computing hardware, mostly because of the extremely low licensing costs. IBM spent a fortune porting Linux to run on their "big iron" machines and it has paid off big time, especially you don't have to deal with sometimes-frightening software license costs! (You're right: the license for Oracle per server can be quite daunting.)

Then again, IBM iron is not as much sold as rented. As such, IBM is to big iron what Apple is to computers. The OS is just there to sell the hardware. I wonder if IBM would pay MS to port Windows if that was what their market wanted.

Yeah, less than the cost of a single employee. And you only have to pay that once every few years, when a new version comes out, if you feel like the upgrade provides enough new features. Sure it's expensive for the start-ups. Most of them use PostgreSQL, MySQL or other free products because when you are 2 people creating a project in your free time you don't have $100,000 to drop on software. Also, your numbers are way off for SQL server. It's only $6000 per socket for standard edition, which is probably